ARIZONA – In order to promote the stability, growth and success of small businesses, especially among entrepreneurs in underserved communities, the Arizona government and the Commerce Authority have partnered with community financial institutions and mentors to launch a new set of programs to support these companies.
According to the Commerce Authority, access to capital is one of the biggest obstacles facing small business owners.
A 2023 report by the Kauffman Foundation revealed that 83% of entrepreneurs do not have access to capital from traditional sources. Similarly, approximately half of small business owners cite “not having enough information about available sources of capital” and “not having enough income or assets to qualify for a loan” as barriers.”
To address these challenges, the Arizona Loan Guarantee Program, which provides guarantees to partner lenders of up to 50%, was launched.
The project helps partner lenders mitigate risk so they can increase the capital available to small businesses located throughout the state. Arizona is currently partnering with three Community Development Financial Institutions (CDFIs) in the loan guarantee program: CDFI Lending, Clearinghouse CDFI and Lendistry CDFI.
Borrowers must be an eligible Arizona small business or nonprofit organization using the funds for purposes such as start-up costs, working capital, equipment, inventory, construction, renovation or other uses.
In addition, the ACA has established a new Technical Assistance Program, which prepares Arizona small businesses for debt or equity financing and provides financial training. Technical assistance is provided on a group or individual basis, depending on the stage of the business.
Funding for the programs comes from the State Small Business Credit Initiative (SSBCI) authorized by the American Recovery Plan Act. Arizona’s programming places special emphasis on businesses owned and controlled by people in socially and economically disadvantaged communities and very small businesses, where barriers to resources are often greatest.
“What these programs are all about is lending a hand to Arizona’s small business owners, especially those in our most vulnerable communities who historically have not had access to capital,” said Arizona Governor Katie Hobbs.
Arizona small businesses that have been operating two or more years and are ready to apply for a loan can complete the Funding Readiness Checklist, and contact one of the three partner lending institutions for a business loan consultation.
For small businesses that have operated less than two years, the ACA has resources and partners to help, including SCORE Greater Phoenix, which offers no-cost mentoring to help small businesses develop and grow, and the Women’s Business Lending Center, which offers training, business assistance and access to capital for women entrepreneurs.
